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Getting your dream car will require a sound financial strategy
Buying a car seems easy enough while sifting through the classifieds, but it can turn out to be more complicated than one thinks. Even if you have narrowed down your car of choice, taking care of the financials is the big task at hand.
Deciding upon which car to buy rests upon a number of issues: what kind of car you are actually looking for, the mode of payment, insurance, and so on. Unless you have saved up specifically to buy a car, it may be more reasonable to get a loan instead of tying up a huge amount of money right away.
Many financial institutions also offer Sharia-compliant payment systems. Some banks offer financing of up to 60 months (the maximum according to the Central Bank), with a minimum down payment of 20%, and more reasonable monthly installments.
In order to be eligible for a loan, one should either be gainfully employed or have a stable business. The financial status of an individual is assessed by the loaning entity – banks or car dealers – through a salary statement history.
The most important aspect of a car loan is the interest rate, so make sure you do your research thoroughly. With so many great deals in the market, you can negotiate a good deal which entails a lower interest rate, no hidden costs or excessive service charges.
Remember that a car loan cannot exceed 80% of the financed car's value. And acquiring a loan is not merely a partnership between the financial institution and the individual; others involved include the manufacturer, dealer, insurer, and even the accessories distributor.
• Opt for a loan if you have not saved up for a car
• A loan cannot exceed 80% of financed car's value
• Some financiers have Sharia-compliant offers
Source: Sabin Muzaffar, Special to Classifieds
The writer is a freelancer